As others have said. There is nothing inherently illegal about the software. As long as you are licensed to share the music you host in the instance there is nothing illegal going on.
Though the RIAA might see it differently, as they have with other open-source software in the past (ref the recent DMCA takedown requests of youtube-dl GitHub repositories). They might argue the software is designed for copyright infringement and as such should be blocked.
Though the RIAA might see it differently, as they have with other open-source software in the past (ref the recent DMCA takedown requests of youtube-dl GitHub repositories). They might argue the software is designed for copyright infringement and as such should be blocked.